At the Retail Day LATAM event held in Buenos Aires, the impact of government measures on consumer purchasing power was a major topic of discussion. Food supply companies, supermarkets and market analysts gathered to discuss the challenges facing the industry. One concerning statistic revealed was a 15% decline in sales volume at large chains in April compared to the previous year, reflecting a general downturn in consumption.
According to Osvaldo del Rio, president of consulting firm Scentia, this decline was due to a 13-14% drop in income in the first quarter. Projections for the rest of the year do not look promising, with estimates suggesting a 9% year-on-year decrease in mass consumption. Inflation, though slowing down, still exerts pressure on prices and wages, making recovery difficult for consumers.
One trend that has emerged is the offering of more products at lower prices as brands try to respond to economic challenges. Brands with lower prices are gaining market share while consumers are gravitating towards cheaper options or smaller quantities of leading brands. Some product categories are being sacrificed as consumers prioritize essential purchases over discretionary spending.
Javier González from Nielsen IQ said that sales in large chains have seen an average decline of 18% in the first three months of the year. Consumers are becoming more selective with their purchases and reducing discretionary spending as they adapt to changing economic conditions.
Overall, it is clear that consumer behavior is adapting significantly as they navigate through these uncertain times. Strategies such as addressing declining purchasing power and changing preferences are being implemented by companies in order to keep up with shifting customer needs and remain competitive within the retail industry.